About the Game

The Fiscal Ship challenges you to put the federal budget on a sustainable course. Measured as a share of gross domestic product, the federal debt is higher than at any time since the end of World War II and projected to climb to unprecedented levels. America is looking at a permanent, growing mismatch between revenues and spending, and policymakers are faced with difficult decisions about how to reconcile important government priorities—including retirement and health benefits promised to the growing number of old folks—with the tax revenues that the current tax code will yield. Today’s tax code won’t yield enough revenue to pay for basic services of government plus the retirement and health benefits promised to the growing number of old folks. So your mission is to pick from a menu of tax and spending options to reduce the debt from projected levels over the next 25 years. Small changes to spending and taxes won’t suffice. The choices are difficult, but the goal is achievable.

Seventh, there is no evidence that outsourcing federal administrative work saves money. For instance, a 2011 study by the Project on Government Oversight estimated that the contractors were paid roughly twice as much as federal workers would have been paid for the same work.

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So here’s hoping that the next debates, town halls and interviews reveal which, if any, candidates for chief executive understand that the federal government became outsized as it became more outsourced — and that, by every measure, today’s full-time federal workforce is overloaded, not bloated.

Is Warren right to call regulatory capture a “big deal”? In some contexts, she probably is. (Financial regulation, her primary concern, may well be an example.) But overall, the research offers a mixed verdict , and a look at what agencies have actually done raises the possibility that the problem is overstated. As of this writing, the Obama administration has issued 3,825 significant rules.1 Of these, no less than 833 are “economically significant,” meaning that they have had an economic impact of more than $100 million per year. How does that fit with the claim that regulators have been captured by regulated industries? Would captured agencies really issue hundreds of significant regulations per year, imposing billions of dollars in annual regulatory costs?

The Case for U.S. Economic Leadership: A Conversation with Jacob J. Lew

Speaker: Jacob J. Lew, Secretary, U.S. Department of the Treasury

Fourth, to prevent a repeat of the financial crisis, we must continue to lead efforts to reform the international financial regulatory system. U.S. leadership in this area has already resulted in more rigorous capital standards for banks, greater transparency in the derivatives market, and stronger tools for managing the failure of financial institutions. With many of the critical standard-setting reforms in place, the focus must shift to comprehensive and consistent implementation and close attention to emerging threats.

There are many ongoing debates about regulation in the United States, and there are competing views about how much regulation is beneficial and worthwhile. But there is no dispute that the regulatory system is costly and has an effect on virtually every American. In a democracy like ours, who decides how much regulatory cost is “enough” or “the right amount”? Right now, the answer is that the federal agencies themselves decide, and very little has ever been done about this state of affairs. Since at least the 1940s, there have been efforts to require agencies to follow procedures dictating how they develop rules, but none to put limits on the costs they can impose.